If

For the person to whom this utility function applies, a. her level of satisfaction will be enhanced equally by an increase in we

Solnce55 [7]

Answer:

b. the more wealth she has, the less utility she gets from an additional dollar of wealth.

Explanation:

Utility is the satisfaction derived from a good. Total Utility is the total satisfaction from all units of a good. Marginal Utility is the additional satisfaction from an additional unit of a good.

The Law of Diminishing Marginal Utility states that : As consumer gets more & more of a good, the additional utility (satisfaction) from each successive unit keeps on declining. It implies that marginal utility decreases, & total utility increases at a decreasing rate.

Therefore : A person has more marginal utility (additional satisfaction) from an additional dollar, if he has less money (dollars). And, relatively less marginal utility from an additional dollar if he has more money (dollars).

Example : A rich person having millions of dollars would get less marginal utility (additional satisfaction) from gaining a single dollar, than a poor person having few dollars.

6 0

3 years ago

You are considering an investment in fields and struthers, Inc, and want to evaluate the firm's free cash flow From the income s

kirill [66]

Answer:

A.) $81,100,000

B.) $64,000,000

C.) $17,100,000

Explanation:

EBIT = $90 million

Tax rate = 21%

Depreciation = $10 million

gross fixed assets increased by $56 million

current assets increased by $44 million

current liabilities increased by $36 million

A.) Operating Cash flow for 2021

EBIT + Depreciation - (EBIT × Tax rate)

$90, 000,000 + 10,000,000 - (90,000,000×0.21)

100,000,000 - (18,900,000) = $81,100,000

B.) Investment in Operating capital for 2021:

Increase in gross fixed asset + (increase in current asset - increase in liability)

$56,000,000 + ( $44,000,000-$36,000,000)

= $56,000,000 + $8,000,000

= $64,000,000

C.) Free cash flow

Operating Cash flow - investment in operating

$81,100,100 - $64,000,000 = $17,100,000

3 0

3 years ago

Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.

GrogVix [38]

Answer:

depreciation expense 5,800 debit

acc dep - building 4,320 credit

acc dep - equipment 1,480 credit

<u>Missing information</u>

GRECO RESORT TRIAL BALANCE AUGUST 31, 2014

Buildings 120,000 Equipment 16,000

Explanation:

First, calcualte the depreciable amount:

cost less salvage value:

120,000 - 10% = 120,000 * (1 - 0.1) = 108,000

Now we multiply this by the depreciation rate which represent 1/useful life

108,000 x 4% = 108,000 x 0.04 = 4,320

We do the same with the equipment

16,000* (1 - 0.1) = 14,800 amount subject to depreciation

14,800 * 10% = 14,800 x 0.1 = 1,480

he adjusting entry will debit the depreciation expense and increase the accumulated depreciation of eahc asset

6 0

3 years ago

The Net Present Value method of project evaluation is preferred over the Internal Rate of Return method because the Net Present

Leno4ka [110]

A because it’s right idkk o think it’s right I honestly guessed

4 0

3 years ago

22. At the end of each year for the next 18 years, you receive cash flows of $3700. The initial investment is $25,200 today. Wha

IrinaK [193]

Answer:

29.37%

Explanation:

Rate of return = Average annual income/Average initial investment

Average annual income = $3,700

Average initial investment = (I+s)/2

Average initial investment = (25,200+0)/2

Average initial investment = $12,600

Rate of return = $3,700/$12,600

Rate of return = 0.2936508

Rate of return = 29.37%

6 0

3 years ago